Southwest Completes Acquisition of AirTran

Southwest Airlines today completed its acquisition of AirTran for about $1 billion, eliminating a low-fare rival and giving itself an opening into lucrative East Coast markets and, if history is any indication, forcing incumbent carriers to lower their fares.

AirTran has routes and airport gates in key markets including New York and Washington, where Southwest has been underrepresented. It also gets Southwest into Atlanta, where it does not now operate.

The carriers will continue to operate separately while operational details of the merger are worked out.

In an email to its Rapid Rewards frequent flyer program this morning, Southwest said the AirTran A+ Rewards program will be merged into Rapid Rewards over time.

“With a larger and stronger combined network, including new international destinations, and the recent launch of the All-New Rapid Rewards, the unification of the two programs will create a superior experience for all Members.,” said Kevin Krone, Southwest's vice president for marketing.

“Both Southwest and AirTran are about low fares and great Customer Service. As a combined company we intend to strengthen and expand low-fare competition,” Krone said. “While we will operate separately for a time, Southwest and AirTran are now one family and our commitment to creating the best customer experience is stronger than ever.”

It's the third major U.S. airline merger in recent years. Delta acquired Northwest in 2008 and United acquired Continental last year.

Based on current operations, the combined airlines would have nearly 43,000 employees and serve more than 100 million customers annually from more than 100 different airports in the U.S. and near-international destinations. In addition, the combined carriers' all-Boeing fleet consisting of 685 active aircraft would include 401 Boeing 737-700s, 173 Boeing 737-300s, 25 Boeing 737-500s, and 86 Boeing 717s.

Southwest says the average age of the aircraft is approximately 10 years, making it one of the youngest fleets in the industry. Southwest also announced, previously, that it is evaluating the opportunity to introduce the Boeing 737-800 into its domestic network.